PARIS — The requirement for higher and higher bandwidth will remain the major driver shaping future satellite infrastructure and services in the next five years, according to Mark Dankberg, chairman and CEO of Viasat.

Speaking Sept. 12 at the World Satellite Business Week here, Dankberg said that terabit-capable satellites like the Viasat3 satellite it is building with Boeing, are more responsive to customer expectations than forthcoming low-Earth-orbit mega-constellations emphasizing lower latency than geostationary satellites.

“Our customer want more bandwidth, they want to be able to stream video,” Dankberg said. “We have done studies when we asked customers what would affect their willingness to pay for a service and we found that latency has the least impact.”

Lower latencies are a major strength of mega-constellations such as the 648-spacecraft fleet of broadband satellites being developed by OneWeb, whose aggressive timetable and a $1.2 billion investment led by Japan’s SoftBank is sending anticipatory shock waves through the industry.

Dankberg was one of five industry leaders on a panel discussing next-generation satellite infrastructure and services.

Luigi Pasquali, CEO of Rome-headquartered Telespazio, agreed that terabit satellites help drive down cost and price for the customer, allowing satellite telecommunications providers to finally compete with traditionally cheaper ground-based telecommunications. However, Luigi said that low-Earth-orbit mega-constellations would likely have a more disruptive effect on the industry.

Pierre-Jean Beylier, CEO of Australia-based Speedcast, said that while low-Earth-orbit mega-constellations represent a revolution in the sector, their actual impact on the market and value for customers remain to be seen.

“The strongest point of the satellite industry is reliability, our systems are more reliable than terrestrial systems,” Beylier said. “The new systems are less reliable than the good old C-band.”

According to Kevin Steen, CEO of iDirect Technologies, the industry in the future will require interoperability solutions that would enable ground-based terminals to switch smoothly between terrestrial 5G networks, LEO, MEO and GEO satellites, ensuring smooth user experience.

Steen said the introduction of flat antennas has the potential to further revolutionize the industry by driving down the cost of small satellite constellations.

When the major domestic stories for the week all revolve around the aerospace industry, it's a reminder of how important our aerospace and space based infrastructure has become for communications and national defence.

With that in mind, and for the week of June 5th, 2017, here are a few of the stories we're currently tracking in the Commercial Space blog:

The Federal government has decided "after a preliminary security screening" that further examination of the proposed sale of Vancouver, BC based Norsat International Inc. to Shenzhen, China based Hytera Communications is not required and the sale will be allowed to proceed.

As outlined in the June 8th, 2017 Globe and Mail article, "Liberals waive security review for Chinese takeover of high-tech firm," the Trudeau government "is allowing Chinese investors to buy a Vancouver high-tech firm without a formal national security review even though Canada and many of its allies use the company’s patented satellite communications technology for security, public safety and defence."

The article quoted several independent authorities, including Richard Fadden, the former Canadian Security Intelligence Service (CSIS) and University of British Columbia professor Michael Byers, as expressing surprise that no formal review was held.

The press release also quoted Fabio Doninelli, a Norsat director and the chairman of the board as stating that, "the review of the proposed transaction under the Act has been extensive and we are very pleased that the notice received has removed a significant pre-condition to closing of the transaction."

This latest Federal government decision is a reminder that the governing Liberal party is far less reticent about the ownership of Canadian high-tech space companies than the previous Conservative government.

On the other hand, what's the loss of one smallish but innovative company, when compared to the opportunity to bid on up to $62Bln CDN worth of defence contracts, especially if there is a strong focus on new technology including:

Eighty-eight new advanced fighters.

New "next generation" multi-mission aircraft (replacements for the Canadian Forces Lockheed CP-140 Aurora).

New air-to-air tanker-transports and new ships to replace the current "Halifax" class frigates.

And even a replacement of the current RADARSAT remote sensing observation system along with the acquisition of other space-based capabilities, including global satellite communications, surveillance of space, and other intelligence, surveillance and reconnaissance contracts, at least if the June 7th, 2017 Aerospace Industry Association of Canada (AIAC) press release, "New defence policy supports Canadian aerospace innovation, industrial capability," is any indication.

But as outlined in the June 7th, 2017 Globe and Mail post, "Ottawa lays out $62-billion in new military spending over 20 years," the new plan, while expected to boost military spending by more than $30Bln CDN over the next decade (most of which will pay for the ballooning cost of new warships and fighter jets) will also push out the bulk of the new expenditures until after the next Federal election.

This delay places the new policy firmly in the same category as the 2008 Conservative government's Canada First Defence policy, which promised many of the same things, but was never implemented when the funding, also promised for "after the next election," never materialized.

It's a shame. The concept of the Canadian government actually paying for its own defence is the sort of thing which might even give the crazy people currently running Washington a slight pause.

June 8th, 2017 screenshot of the Federal government webpage on, "Decisions on the Licensing Framework for Non-Geostationary Satellite Orbit (NGSO) Systems and Clarification of Application Procedures for All Satellite Licence Applications." Screenshot c/o Government of Canada.

The Federal government has also issued a series of substantial revisions to its satellite licensing rules.

The changes are also the result of a consultation process with input from twelve companies and one "coalition" of firms, which began in March 2017. Participants included Boeing, GHGSat, Kepler Communications, Meridian Global/Northpoint, Microsat Systems Canada Inc. (MSCI), NorthStar Aerospace, O3b Networks (O3b), OneWeb, Planet Labs Inc., SpaceX, Telesat Canada (Telesat) and ViaSat Inc.

Kourou, French Guiana (ESA) May 30, 2017
For its sixth launch of the year, and the third Ariane 5 mission in 2017 from the Guiana Space Center in French Guiana, Arianespace will orbit two satellites: ViaSat-2 for ViaSat Inc.; and EUTELSAT 172B for Eutelsat.
This mission - the 237th overall by an Ariane launcher - will mark a new all-time Arianespace record for a total payload weight orbited: 10,865 kg., including a net mass at li Перейти к новостиКлючевые слова:Eutelsat Communications S.A., Серия РН Ариан, Серия РН Ариан 5, ViaSat Inc

Kourou, French Guiana (ESA) Jun 02, 2017
Arianespace has successfully launched two telecommunications satellites: ViaSat-2 for ViaSat Inc.; and EUTELSAT 172B for the operator Eutelsat - which is the first all-electric satellite to be orbited by an Ariane 5.
The launch took place on Thursday, June 1 at 8:45 pm (local time) from the Guiana Space Center (CSG), Europe's Spaceport in Kourou, French Guiana.
Today's launch was the Перейти к новостиКлючевые слова:Eutelsat Communications S.A., Серия РН Ариан, Серия РН Ариан 5, ViaSat Inc

WASHINGTON — SpaceX plans to conduct the debut launch of the Falcon Heavy rocket this summer using two boosters that have already flown on other missions, SpaceX Founder and Chief Executive Elon Musk said March 30.

Speaking after the company’s success in launching its first pre-flown first stage with the SES-10 satellite aboard, Musk said SpaceX has worked out most of the challenges associated with getting three Falcon 9 cores to fly together — a task that has proven much more complex than it originally appeared.

“Falcon Heavy is one of those things that at first it sounded easy,” Musk said. “We’ll just take two first stages and use them as strap-on boosters. And like, actually no, this is crazy hard, and required a redesign of the center core, and a ton of additional hardware. It was actually shockingly difficult to go from a single core to a triple-core vehicle.”

Falcon Heavy is designed to lift more than 54 metric tons to low Earth orbit, 22 metric tons to geostationary transfer orbit, or 13.6 metric tons to Mars. When SpaceX first revealed the Falcon Heavy in 2011, the company anticipated a first mission in 2013, but complexities in getting the vehicle to work, combined with delays from two Falcon 9 failures, dragged out that timeline.

“Our expectation is probably a late summer launch of Falcon Heavy,” he said.

Musk tweeted March 31 that SpaceX is also considering trying to retrieve the Falcon Heavy demo flight’s upper stage for full reusability. The probability of success is low, he said, but could be worth trying anyway. Yesterday Musk mentioned trying to return the second stage from Falcon 9 missions as well, and as an added bonus from the SES-10 mission, already accomplished a surprise recovery of the Falcon 9 payload fairings.

The first stages reused in the Falcon Heavy’s tentative 2017 debut will go towards SpaceX’s plan to refly about six boosters this year.

“For Falcon Heavy, two of the side boosters are pre-flown boosters, so that alone will be two cores right there,” Musk said.

SES is considering using two more “flight-proven” Falcon 9 rockets this year, which would fulfill five of the six reusable rocket missions SpaceX is gunning for, according to SES Chief Technology Officer Martin Halliwell.

Halliwell said SES has three more launches with SpaceX this year, and is willing to use flight proven rockets again to help normalize the concept of using reusable launchers.

“My belief is that within 24 months, people like SpaceX, or SpaceX specifically, will offer a service to orbit, and it will be irrelevant,” Halliwell said. “It will be irrelevant if it’s new or if it’s pre-flown — it will be irrelevant within 24 months.”

Musk said the rocket cores for Falcon Heavy’s first flight are two to three months away from completion. He emphasized that the first launch will carry a lot of risk, and as such, SpaceX doesn’t plan to carry a valuable payload or payloads with it.

“We will probably fly something really silly on Falcon Heavy because it is quite a high risk mission,” he said.

SpaceX will seek to recover all the boosters from the first Falcon Heavy flight, assuming all goes according to plan. Musk said the two side boosters would land back at Cape Canaveral Air Force Station, followed by the center core returning to a drone ship in the Atlantic.

SpaceX anticipates having Cape Canaveral’s Space Launch Complex-40 — the pad damaged in the September 2016 explosion of a Falcon 9 during a fueling procedure — operational again before launching Falcon Heavy. SpaceX needs to exercise this caution because were a Falcon Heavy launch to go awry from Pad 39A, the company would be out of launch sites in Florida. Musk said SLC-40 would serve as the go-to location for Falcon 9 missions, and SpaceX would keep Falcon Heavy launches at Pad 39A.

Musk also said SpaceX is prioritizing fulfilling launch commitments to its backlog, which is mainly waiting on Falcon 9 missions. A number of those customers have faced protracted delays and some, such as Spaceflight Inc., have sought alternative launchers after the wait became too much to bear.

SpaceX does have customers for Falcon Heavy as well. The U.S. Air Force, Intelsat, Inmarsat, ViaSat and Arabsat all booked Falcon Heavy missions, though Inmarsat and ViaSat have since sought alternative rides. ViaSat switched its ViaSat-2 satellite to a mid-2017 Arianespace Ariane 5 launch. Inmarsat reserved a Proton launch as a backup for Europasat/Hellas-Sat-3, a condo-satellite split between Inmarsat and Greek satellite operator Hellas Sat, the latter of which is a subsidiary of Saudi Arabia-based Arabsat.

Currently both Arianespace and Proton’s commercial services provider, International Launch Services (ILS), are experiencing delays of their own. Arianespace has been unable to launch for nearly two weeks due to territory-wide protests in French Guiana where it launches. Russia’s Proton rocket has been grounded since late 2016 due to quality control issues with second and third stage engines, and is not expected to return to flight until May. Although Inmarsat had reserved a 2017 ILS launch, delays with Proton have pushed that mission back too. ILS’s commercial manifest for 2017 includes three commercial missions: one for EchoStar, one for AsiaSat and one for Hispasat.

PARIS — ViaSat Inc and SES-owned O3b Ltd., two satellite fleet operators providing commercial Ka-band broadband from different orbital vantage points, look to become direct competitors based on new satellite constellations both are proposing to U.S. regulators.

ViaSat wants augment its planned global network of three ViaSat-3 satellites in geostationary orbit, each with an advertised 1 terabit per second of throughput, with a constellation of 24 medium-Earth-orbit satellites operating in three orbital plans inclined at 87 degrees relative to the equator.

According to Carlsbad, California-based ViaSat’s Nov. 15 proposal to the U.S. Federal Communications Commission (FCC), the ViaSat constellation would be placed in circular orbit at 8,200 kilometers in altitude.

The system, which is registered in The Netherlands, would use both Ka- and the higher V-band frequency. ViaSat said it would seek a waiver of current FCC restrictions on the use of V-band spectrum by guaranteeing that it would not interfere with terrestrial wireless operators in the same frequency.

ViaSat also said it will not interfere with O3b’s network of medium-Earth-orbit satellites, operating in an unusual equatorial orbit but at the same 8,200-kilometer altitude as the ViaSat system.

ViaSat did not provide a cost estimate in its proposal but the FCC has said any system would need to be in service within six years of receipt of its U.S. license.

ViaSat is already building two of the planned three ViaSat-3 satellites, with launches planned for the end of this decade. Whether the company’s shareholders will accept the large investment in a constellation at the same time is unclear. ViaSat said that, once in orbit, its satellites would operate for 20 years.

The same day that ViaSat submitted its proposal, O3b asked the U.S. regulatory for a license to operate a network that adds new frequencies and a new orbit to the existing 12-satellite O3b network.

O3b wants three separate constellations

O3b, owned by Luxembourg-based SES, which has a 50-satellite fleet in geostationary orbit, is asking the FCC for three separate approvals. The first is an amendment to a previous modification to its network to permit the addition of eight new satellites into the same equatorial, 8,200-kilometer orbit. O3b now wants to add additional frequencies on four of those eight satellites.

The eight spacecraft are under construction at Thales Alenia Space of France Italy and are scheduled for launches, four at a time, on two Europeanized Russian Soyuz rockets operated by Europe’s Arianespace launch-service provider in 2017 and 2018.

A second request is that O3b be allowed to operate a constellation of up to 24 satellites, called O3bN, also in circular equatorial orbit, but using a wider range of Ka-band radio frequencies.

O3b’s third request is for a license to operate up to 16 satellites in inclined orbit and flying at an altitude of 8,062 kilometers and inclined 70 degrees relative to the equator. The constellation, called O3bI, would be deployed in two orbital planes of eight satellites each and would also use Ka-band.

O3b said that from its equatorial orbit its service is assured from between 63 degrees north and 63 degrees south latitude. The O3bI constellation would extend that to full-Earth coverage.

The company said the two new constellations would operate separately from the current O3b network, although the equatorial-orbit spacecraft could be used if needed to fill in capacity on the existing network following a launch or in-orbit failure that created a gap in coverage.

Interference mitigation may get harder

O3b’s current constellation, which has a U.S. license, has had a relatively easy time of it with respect to signal-interference mitigation because no other non-geostationary-orbit satellite systems have as yet received a license to operate.

In the case of the [inclined-orbit] satellites, there is a potential for more in-line interference with other inclined [non-geostationary] systems,” O3b allowed, adding that since its inclined-orbit is comprised of only 16 satellites, the interference issue should not be insurmountable.

“Currently there are no other [non-geostationary] satellite systems licensed by the Commission, or granted U.S. market access, that serve customers within the Ka-band frequency ranges,” O3b said.

That is likely to change. The O3b and ViaSat FCC submissions were in response to the agency’s call for non-geostationary proposals to make themselves known by Nov. 15 so that they could be compared with OneWeb LLC.

OneWeb has 11 new friends at the FCC

The agency has already received a license request from OneWeb, of Britain’s Channel Islands, which is building a network of 700-plus satellites in low Earth orbit using Ku-band spectrum to communicate with user terminals and Ka-band to communicate with the network gateway Earth stations.

Eleven proposed networks were submitted under the same FCC-imposed deadline, including well-known proposals such as SpaceX’s 4,000-satellite network, Telesat’s 117-satellite constellation, a 60-satellite Ka-band constellation proposal from Boeing and LeoSat’s network.

Other proposals came from Audacy Corp., Karousel, Space Norway,Kepler Communications and Theia Holdings.

In addition to these companies, O3b and other proposed systems employing Ka-band from non-geostationary orbit will need to assure regulators that they will not interfere with mobile satellite services provider Iridium Communications of McLean, Virginia, whose user communications links are in L-band but which uses Ka-band links to its gateway Earth stations.

"Constellations" of satellites, working in concert to provide telecommunications access to currently unserviced and under-served regions are the latest profitable area of growth for space focused ventures.

Screen grab from November 17th, 2016 You-Tube video, "SpaceX seeks approval for satellite powered internet service - Elon Musk." As outlined in the January 16th, 2015 Seattle Times post, "Elon Musk touts launch of ‘SpaceX Seattle,’" the program was publicly announced in January 2015, with the projected capability of supporting the bandwidth to carry up to 50 percent of all backhaul communications traffic and up to 10 percent of local internet traffic in high-density cities. To accomplish this, each of the 4425 proposed satellites (more than the total of all currently operational satellites) is expected to weigh approximately 850 pounds (the size of a small car) and intended to orbit at an altitude of between 1,150 kilometers and 1,275 kilometers. To see the complete video above, simply click on the screen grab. Screenshot c/o AB Video Studio.

Audacity Corp (FCC file number SATLOA2016111500117) - Launched in 2015 by a team of Stanford graduates, ex-NASA employees, and SpaceX veterans, the company proposes three medium Earth orbit (MEO) satellites just to speed up the connectivity of the satellites being proposed by other companies listed below. As outlined in the proposal the company requested "authority to launch and operate a non-geostationary fixed- and inter-satellite service system operating in medium Earth orbit" using a variety of frequencies and lower latency.

The Boeing Company (FCC file number SATLOA2016111500109) - As outlined in their proposal, Boeing requested "authority to launch and operate a non-geostationary satellite orbit system operating in the Fixed-Satellite Service in the 17.8-19.3 GHz and the 19.7-20.2 GHz bands (space-to-Earth) and in the 27.6-29.1 GHz and the 29.5-30.0 GH." As outlined in the June 23th, 2016 Space News post, "Boeing proposes big satellite constellations in V- and C-bands," Boeing wants US and international regulators to relax constraints on low-orbiting satellite broadband constellations using those frequencies and "has specifically asked for a license to launch and operate a network of 1,396-2,956 V-band satellites."

Karousel LLC (FCC file number SATLOA2016111500113) - A mostly unknown start-up, with little public information available, backed by venture firms Columbia Capital & Telecom Ventures. As outlined in its FCC application, the company wants approval for a small, twelve-satellite system, composed of three groups in opposing, highly elliptical orbits.

Kepler Communications (FCC file number SATLOI2016111500114) - This Canadian start-up, last profiled in the August 16th, 2016 post, "Kepler Communications Raises $5Mln in Venture Funding," has joined the FCC party for non-GEO constellations after spending most of its short corporate career attempting to sell low-cost nano-satellite re-transmitters or "repeaters." As outlined in their FCC application, Kepler plans on deploying up to 140 satellites, including spares, in a non-geostationary (NGSO) low-earth polar orbit between 500-650 km using seven orbital planes with 20 spacecraft equally spaced in each orbital plane between 2017 and 2022. The company intends to target machine to machine communications, not the conventional terrestrial telecommunications market.

LeoSat MA Inc. (FCC file number SATLOI2016111500112) - As outlined on the LeoSat website, the start-up was established in 2013 by two former Schlumberger executives with "direct experience of the challenges of business data transportation." The company has partnered with Thales Alenia Space to "manufacture and launch a constellation of up to 108 Ka-band communications high-throughput satellites (HTS), which will be interconnected through laser links, effectively creating an optical backbone in space about 1.5 times faster than terrestrial fiber backbones."

Space Norway AS (FCC file number SATLOI2016111500111) - The Norwegian based company has "requested access to the US market for its planned Arctic Satellite Broadband Mission (ASBM)," a high elliptical orbit, non-geostationary orbit satellite system with more than a passing resemblance to the stalled, Canadian Polar Communication and Weather (PCW) mission.

Theia Holdings A, Inc (FCC file number SATLOA2016111500121) - As outlined in its proposal to the FAA, this little-known start-up has proposed launching 112 hyperspectral Earth observation & communications satellites into various orbits.

ViaSat, Inc. (FCC file number SATLOI2016111500120) - ViaSat is a provider of high-speed satellite broadband services and secure networking systems covering military and commercial markets. It currently possesses one operational satellite, ViaSat-1, which launched in 2011, and expects to launch its second satellite, ViaSat-2, in the first quarter of 2017. The latest proposal calls for a constellation of 24 MEO satellites operating in Ka- & V-band, operating at 8,200 km, in a variety of orbits with 20 year operational lives and MEO-to-GEO links.

The eleven applications listed above are not the only satellite constellation applications received by the FCC over the past year. Applications have also been received from WorldVu Satellites Limited, operating as OneWeb (on April 28th, 2016 as per FCC file number SATLOI2016042800041) and Spire Global, Inc. (on November 14th, 2016 as per FCC file number SAT-LOA-20151123-00078).

Terrestrial based telecommunications firms are also defining their territory, mostly via litigation as they push back against the satellite providers attempting to disrupt their existing revenue model. As outlined in the June 9th, 2016 Space News post, "Dish Network battles OneWeb and SpaceX for Ku-band spectrum rights," they have achieved at least some success in this area.

LONDON — Satellite broadband hardware and services provider ViaSat Inc. on Nov. 8 said it had contracted with a U.S.-based commercial airline to retrofit more than 500 aircraft with ViaSat’s Ka-band airline connectivity system.

In a conference call with investors, ViaSat Chief Executive Mark D. Dankberg declined to disclose the customer’s identity, saying the airline would make an announcement in short order.

ViaSat President Richard A. Baldridge said installations would begin in mid-2017 and would occur over a period of about 18 months.

Southwest Airlines, or someone else?

Speculation was rife in the hours after the announcement about what customer — American Airlines and Southwest Airlines were mentioned as possibilities — had delivered such a sizable endorsement to ViaSat, and which ViaSat competitor — Gogo or Global Eagle Entertainment — might be affected by the decision.

The order will about double the fleet of aircraft using ViaSat’s Exede in the Air WiFi system. The company said that as of Sept. 30, it had 533 aircraft in service using ViaSat’s system. Including the 500-aircraft order from the undisclosed customer, ViaSat said it had booked orders for 650 aircraft since Sept. 30.

Carlsbad, California-based ViaSat’s consumer and commercial airline broadband satellite networks have been perhaps the most dynamic of the company’s businesses. But ViaSat’s sale of broadband mobility hardware and services to the U.S. government has also shown remarkable growth.

Double-digit growth in government revenue, led by broadband mobility

ViaSat’s Government Systems division reported revenue of $323 million for the three months ending Sept. 30, up 10 percent from the same period a year ago. New orders during the period totaled $517 million, up 45 percent.

Dankberg said that hardware for tactical radio links and secure communications networks played a role in the growth but that mobile broadband is the division’s real growth engine.

Consumer subscriber count down, but monthly revenue up

ViaSat’s consumer satellite broadband service in the United States lost 10,000 net subscribers in the three months ending Sept. 30, ending at 686,000, in part because capacity on the company’s ViaSat-1 satellite has filled up in high-demand regions of the United States.

But per-subscriber revenue, at $61.55 per month, was up 9 percent from a year ago, continuing a steady growth over the past year as ViaSat introduced higher-speed subscription plans to consumers ready to pay more for more bandwidth.

In the five years since the launch of the ViaSat-1 satellite, ViaSat said its average monthly subscriber revenue had increased by an average of 7 percent per year.

The ViaSat-2 satellite, much bigger than ViaSat-1 and intended to return the consumer service to growth, is scheduled for launch between late March and April aboard a European Ariane 5 rocket.

After some two months of in-orbit checkout, service is scheduled to start by next summer.

ViaSat’s ViaSat-3 system is intended to provide 1 terabit per second of bandwidth. ViaSat has ordered two ViaSat-3 platforms from Boeing but, in a departure from past practice, is developing the payloads itself.

ViaSat-3: global ambitions, but only 2 satellites for now

The company said a preliminary design review of ViaSat-3 was scheduled to occur with Boeing the week of Nov. 14. The first ViaSat-3 is scheduled for launch in 2019, with the second some six months later.

A third satellite would be needed to provide full global coverage from geostationary orbit. ViaSat’s contract with Boeing includes an option for two more ViaSat-3 platforms. Dankberg said during the conference call that recent events, especially developing in the airline in-flight-connectivity business, suggest that ViaSat-3 will not be late in capturing the huge growth in this market niche.

“The schedule of the ViaSat-3 satellites lines up increasingly well with the fleet expansion plans of a number of leading airlines around the world,” Dankberg said.

But the company had yet to exercise one of the options with Boeing, leaving ViaSat-3 as a two-satellite system for now, covering the Americas, Europe and Africa.

In a Nov. 9 filing with the U.S. Securities and Exchange Commission (SEC), ViaSat said it expects to formalize by March a joint venture agreement with fleet operator Eutelsat of Paris on consumer satellite broadband service in Europe.

SINGAPORE – Australia’s NBN Co. on May 31 said it will use the full capacity of its second Ka-band spot-beam satellite, scheduled for launch this year, to accommodate the faster-than-expected rise in bandwidth demand rather than keep it as an in-orbit spare.

The decision follows what NBN Chief Executive Bill Morrow said has been a spike in average bandwidth consumption by Australians due to the same Netflix/video-streaming effect seen in other nations.

“In the last 12 months our end users have increased their data consumption by more than 60 percent and now average 115 gigabytes per month,” Morrow said in an address here to the CommunicAsia conference.

NBN is financed by the government but has a mandate to make a profit. It is deploying what is probably the most extensive and costly broadband-connectivity program of any major nation.

Using a combination of fixed wireless, fiber-to-the-premise, fiber-to-the-home, hybrid fiber/coaxial and satellite platforms, NBN’s charge is to connect all Australians by 2020. Some 400,000 premises will be connected by satellite, according to NBN.

The capital investment – two large satellites, two rocket launches, insurance, a ground network and user terminals – works out to 7,900 Australian dollars ($5,670) per satellite subscriber premise, NBN estimates.

Fifteen of the 50 registered distribution partners are now active structuring retail sales packages in the 121 geographic zones identified by NBN. Each zone has its assigned technology based on population density and other factors.

The poorest families will get a contended service that forces bandwidth sharing, especially during peak hours. More demanding households and small businesses will be offered a guaranteed throughput for a higher price.

“Retailers can sell a highly contended service for 30-40 dollars per month, with customers that demand 50 megabits per second all the time a service for maybe 80-100 a month,” he said.

Australia is about the same size as the continental United States but its population, at 24 million, is one-thirteenth the U.S. size and averages just three people per square kilometer.

In his address, Morrow used the United States as an example of a wealthy nation with a history of legacy telecommunications providers and newer private-sector cable operators – initially not competing with each other — that was nonetheless unable to fashion sufficient economic incentive to extend deployment into rural areas.

“Based on what we see around the world, it is quite clear that the private sector models lack universal access,” Morrow said. “We offer a return on investment but because the shareholder is the government, we consider the broader benefits to the economy and society on making strategic investment decisions. Wholesale cost will always be debated. Do we want to make profit? Right now we are held to profitability. That’s why it is retailers that determine how to approach each of the market segments.”

NBN’s mandate is at least 50 megabit-per-second links to a majority of Australians, with the rest guaranteed at least 25 megabits per second, with a path to service enhancements if demand exceeds supply.

It looks like this will be the case sooner than expected. In late 2015 NBN decided to move thousands of homes located in regions assigned satellite delivery to fixed-line and fixed-wireless service to relieve demand on the Sky Muster 1 satellite. NBN was then able to raise the monthly data caps that satellite consumer broadband providers say is the least-liked feature of their service.

One of two identical satellites built for NBN by SSL of Palo Alto, California, Sky Muster 1 was launched in October 2015. It has a total throughput capacity of 74 gigabits per second divided among 101 spot beams that are sliced into 85 different sizes depending on population density and take-up rate in their respective regions.. ViaSat Inc. of Carlsbad, California, is providing the NBN ground terminals.

Nearly one in four homes now connected to the NBN service when all delivery platforms are combined. Within 12 months half the nation will be connected, NBN said.

Moving satellite subscribers to terrestrial platforms is a stopgap solution. To materially improve the performance of the satellite service, NBN has decided to use the second satellite, scheduled for launch this year aboard a European Ariane 5 rocket, to nearly double the available capacity of the service.

“That second satellite was originally intended to be there for reliability and redundancy,” Morrow said. “As the satellite people will know, the probability of something going awry after a certain period of time drops down to almost nothing. It doesn’t make much sense to have a $200-to- $300 million insurance policy up in the sky. So we have repurposed it for capacity.”

Some of the available bandwidth has been reserved to assure that rural schools, hospitals and other high-priority services have sufficient connectivity even in peak demand hours.

And when even the two satellites near saturation? “We’ll put up another satellite,” Morrow said.

PARIS – Satellite broadband hardware and service provider ViaSat Inc. on May 24 said it would accelerate investment in its terabit-per-second-throughput ViaSat 3 satellite program and continue to invest in licenses for its airline-connectivity business.

The company also posted strong growth in its U.S. Defense Department business, both in mobile broadband and tactical radio provision, despite the fact that ViaSat is not reliant on the U.S. military’s “programs of record,” meaning programs given formal development status in the military budget.

ViaSat’s message is that, commercial or military, customers want the broadband spigot to be turned to maximum bandwidth.

In a conference call with investors, ViaSat Chief Executive Mark D. Dankberg dispelled any doubts ViaSat’s about the company’s commitment to ViaSat-3, which for now is a two-satellite, billion-dollar-plus program.

Dankberg said ViaSat recently opened a new satellite production facility in Arizona, including a cleanroom and high bay to build two ViaSat-3 payloads at a time.

In what is perhaps a lingering consequence of its previous struggle with a satellite builder over intellectual property rights, ViaSat is building the two ViaSat-3 satellites’ payloads. Boeing Space and Intelligence Systems of El Segundo, California, is building the satellite skeletal structures.

“Growing market interest in our technology is motivating us to invest to get this productivity gains and geographic coverage of ViaSat-3 class satellites as fast as we reasonably can,” Dankberg said.

To fund payload development, ViaSat is increasing its R&D spending in fiscal-year 2017, which began last April 1, by 50 percent, to around $115 million. That follows a year when R&D increased 65 percent.

The company said the investment would be a drag on profit in fiscal-year 2017, which is why ViaSat stock suffered in May 25 trading on the U.S. Nasdaq exchange. ViaSat also announced it had secured a 60 percent increase, to $800 million, in an existing revolving loan to fund ViaSat-3.

R&D investment in commercial airline connectivity

Most of the spending is devoted to ViaSat-3 and represents investment that otherwise would be part of the payments to the satellite prime contractor. Most satellite operators do not build their own payloads. But some will be to secure licenses, called Supplemental Type Certificates (STCs) to allow its airline connectivity hardware to be fitted onto aircraft.

ViaSat Chief Financial Officer Sean Duffy said the STC spending would be “success-based,” presumably meaning it would be incurred only following contracts with airlines or with high confidence of an imminent contract.

The company added 30 new commercial aircraft to the fleet of planes equipped with ViaSat’s airborne connectivity service, bringing the total to 476 as of March 31.

When military and business-aviation planes are added, the total ViaSat-equipped fleet is more than 1,000 planes, Dankberg said.

ViaSat is in an intense competition with at least four other companies trying to line up airline commitments to their on-board WiFi service. For many airlines, only a global system will do, which is why ViaSat needs to expand from its current focus over the Americas.

In addition to its higher throughput, ViaSat-3 will expand the geographic footprint of the company’s Exede in the Air product into Europe, the Middle East and Central and South Asia. A third ViaSat-3, not yet under contract, is envisioned over the Asia-Pacific.

ViaSat already offers a near-global network using its own Ka-band satellites over the Americas and leased Ku-band capacity elsewhere. The company on May 24 announced a contract with business-jet builder Dassault Aviation to use this Ku-band network for the new Falcon 8X.

U.S. consumer broadband subs, ARPU grow despite capacity crunch

ViaSat’s consumer broadband business in the United States has suffered from the lack of available ViaSat-1 satellite capacity in high-demand regions. ViaSat-2 is scheduled for launch late this year or early in 2017 and is expected to solve that problem in addition to expanding Via:Sat’s coverage into the North Atlantic air corridor.

Because ViaSat-1 beams over high-demand areas are about full, ViaSat has been unable to grow its subscriber base much. But the company said it added 9,500 new subscribers, bringing the total to 697,000 as of March 31.

The capacity shortage has not prevented ViaSat from offering new, higher-speed packages and other service enhancements that have increased average monthly subscriber revenue to $58.46.

Dankberg spent part of the investor call summarizing his view that most satellite fleet operators are heavily invested in a business model in which bandwidth is scarce. He said the company’s imminent ViaSat-2 and future ViaSat-3 programs have forced satellite competitors to recast their broadband offers.

“Pretty much every competitor is reframing their go-to-market strategy around either imitating, or denying the existence of, our competitive advantages,” Dankberg said, adding that the new Ku-band spot-beam high-throughput satellites, while better than existing wide-beam satellites, are still “much worse than what ViaSat-1 is delivering now.”

Hand-held military radios to add to military division growth

ViaSat’s Government Systems division revenue for the year ending March 31 was up 13 percent over the previous year, to $607 million. EBITDA, or earnings before interest, taxes, depreciation and amortization, was up 21 percent, to $144 million.

ViaSat has said the U.S. military is slowly moving to the higher-bandwidth potential of Ka-band. The extent and speed of this transaction are a subject of debate between Ka- and Ku-band advocates.

In addition to broadband mobility, the biggest driver of ViaSat’s military business, the company has had success with its aircraft radio terminals. Testing and earlier this year began tests with the military of ViaSat’s BATS-D, or Battlefield Awareness and Targeting System-Dismounted. These are hand-held radios that give individual soldiers the same basic transmission capacity up to now reserved for airborne platforms.

BATS-D plus ViaSat’s Small Tactical Terminal “extend the capabilities of Link 16 to hundreds, and if successful ultimately tens of thousands, of participants that otherwise would not have had access to that valuable real time situational awareness,” Dankberg said.

PARIS—In-flight connectivity provider Gogo Inc. on May 23 denied that it won a recent competition against Inmarsat and Panasonic Avionics by offering what industry officials said was rock-bottom pricing, saying the competition with Inmarsat, at least, presented customer International Airlines Groupe (IAG) with an obvious choice.

“There is absolutely no comparison in the two products,” Gogo Chief Executive Michael Small told an investor conference organized by J.P. Morgan.

He said Inmarsat’s Ka-band Global Xpress service “is not global – not even close, not with three satellites. There are plenty of areas on British Airways’ route structure where you could not get coverage. The theoretical maximum is 50 megabits per second in their network today. We’re clearly going by 100 megabits per second. Ours is flying today. Theirs is still waiting to go operational. We’ve installed thousands of planes around the world. They haven’t installed any,” Small said.

“I think the last thing the decision was made on was price. We have the better next-generation solution.”

Chicago-based Gogo on May 5 announced it had won the contract to outfit up to 137 aircraft – 118 British Airways jets, four Aer Lingus Boeing 707s and up to 18 Iberia Airlines planes. The first aircraft are expected to be in service in 2017, with most of the rest to be flying in 2019.

Small’s remarks came in the wake of industry comment that Gogo offered IAG contract terms that the competitors refused to match. It is not clear whether this commentary is losers’ sour grapes or based on an assessment of the likely profitability of the deal.

The airline connectivity business continues to test several different business models, with no clear pattern established of which party – passengers, the airlines or the service providers – pick up which part of the total investment cost.

London-based Inmarsat’s Global Xpress service uses three geostationary-orbit satellites, with a fourth on the way, to provide Ka-band connectivity. The company is also building a European air-to-ground network to complement Global Xpress in the crowded, high-demand European airspace, and has leased Ka-band capacity for northern latitudes on Norway-based Telenor Satellite’s Thor 7 satellite, which is in orbit.

Inmarsat is conducting Global Xpress tests with Honeywell before debuting Global Xpress airline service this summer. The company has signed on Lufthansa German Airlines as an inaugural customer, with several dozen Lufthansa aircraft likely to enter service in the coming months.

Gogo’s competing product is 2Ku, a service featuring a new modem and antenna design coupled with high-throughput satellite capacity from fleet operators Intelsat and SES, among others.

Gogo has said it would have 75 2Ku-equipped aircraft in service by the end of 2016, with another 300 to be added in 2017.

Inmarsat officials have said that their advertised throughput is closer to what actual airline passengers will see in real-world use, particularly over congested hubs, and that Gogo’s 100 megabits per second to each plane will collapse in congested airspace with high contention ratios – other planes drawing on the same satellite bandwidth pipe.

Gogo and Inmarsat, along with competitors ViaSat Inc. of Carlsbad, California; Global Eagle Entertainment of Los Angeles; and Thales LiveTV of France are all furiously making the rounds of global airlines to line up as many aircraft as possible.

Small said that when the music stops – when the major airlines have picked suppliers – that only two or three companies would be able to survive.

“Scale in this business is measured by thousands of aircraft,” Small said. “It’s our strategy to get to thousands of aircraft by organic growth. Anybody who doesn’t have thousands of aircraft is going to have to find an exit strategy, somehow.”

The adoption by the major airlines of an in-flight connectivity partner is happening fast. Industry officials said within a few years, the major lineups of airlines with service providers should be about completed.

Small said that the top 100 airlines all would have made their choice of service providers by the end of 2018. Only a handful of them have decided on a fleet-wide basis so far.

With the clock ticking, all the competitors are making large investments. Two of them – Inmarsat and ViaSat – are using their own satellites plus strap-on capacity provided by third-party operators to fill in their geographic footprints.

Inmarsat is investing in a fourth Ka-band Global Xpress satellite, in the Thor 7 lease and in an expensive air-to-ground terrestrial network for Europe. ViaSat is investing more than $1 billion in next-generation Ka-band satellites with aeronautical connectivity – military and commercial – as a principal target market.

The three others are scooping up satellite bandwidth as the major fleet operators – SES, Intelsat, Eutelsat, Telesat and others — announce high-throughput satellite capacity.

Small said the glut of satellite bandwidth means Gogo is paying 70 percent less for satellite bandwidth now than it did just a year ago. He said prices would continue to drop – good news for his company.

Less-good is that outfitting an aircraft with new connectivity gear costs between $250,000 and $500,000 per plane, a figure that does not drop much even when lots of planes are involved unless these are line-fits done as new planes are manufactured.

These costs add up. Gogo announced May 23 that it had secured a new credit line of $525 million – due in 2022 and carrying an interest rate of 12 percent – to repay existing debt and finance the 2Ku rollout.

Credit-ratings agency Standard & Poor’s gave a “negative rating outlook” on the Gogo debt, saying “ongoing capital expenditures from expansion activity will diminish the company’s current cash balance, possibly resulting in the need for external financing in two to three years.”

PARIS—Satellite broadband hardware and service provider ViaSat Inc. on May 18 laid out what it sees as multibillion-dollar markets in aeronautical and maritime connectivity and sought anew to persuade investors that its satellites deliver substantially more bandwidth for the buck than competitors’ spacecraft.

Taking fresh aim at the company’s biggest aeronautical connectivity competitor, Gogo Inc. of Chicago, ViaSat Chief Executive Mark D. Dankberg said Gogo’s new 2Ku modem, which Gogo claims is the state of the art and offers 70 megabits per second to a given aircraft, will be gasping for air in densely populated airspace over airports.

“Say 70 megabits per airplane. OK: But 100 airplanes over Chicago? They do not have 7 gigabits of bandwidth, they maybe have 200 megabits in total,” Dankberg said at a MoffettNathanson Research investor conference. “We are now [with the ViaSat-1 satellite] at 100 megabits per second per plane. We’ll get to 200 megabits and we’ll have multiple gigabits of capacity over Chicago. We’re already in the 1 gigabit range.”

ViaSat-1 provides a total throughput of about 140 gigabits per second. ViaSat-2, set for launch in early 2017, has about 300 gigabits of throughput. ViaSat-3, to launch around 2019, is designed to provide 1 terabit per second of throughput.

Dankberg said ViaSat-3 in fact might surpass the 1-terabit milestone.

“It’s in the terabit range,” he said. “If things go well it could be more.” Carlsbad, California-based ViaSat has two ViaSat-3 satellite platforms on order from Boeing Space and Intelligence Systems of El Segundo, California. ViaSat is building the payloads on its own.

Gogo Chief Executive Michael Small said the 2Ku modem, which is now being deployed onto Gogo customers’ planes, can deliver up to 400 megabits per second of throughput, future-proofing the system as satellite bandwidth availability increases.

“There’s plenty of room to grow” with 2Ku, Small told investors May 6. “I’m very comfortable we will be able to meet the needs of the entire aircraft, no matter how big the aircraft is, and will do it more economically than anybody else in this industry.”

Small said Gogo has not made a religion of Ku-band and would switch to Ka-band if that frequency proved to offer a superior service and provided the redundancy that comes from having dozens of satellites in orbit, from multiple providers. That is not the case with Ka-band.

“Today we don’t wee a lot of benefit to spending money on a Ka-band solution,” Small said. “But if it turns out that that ecosystem gets going and has true global coverage and redundancy and all the things we’re looking for, then we’ll adopt Ka-band. I don’t see that as imminent.”

ViaSat, Gogo, Panasonic Avionics, GEE, Inmarsat, Thales LiveTV – all the companies in the in-flight-connectivity market are struggling to find the right business model for themselves and to their customers.

Dankberg said its customer, JetBlue Airways, attracts an average of 6.7 percent of its passengers to its on-board WiFi service, a figure that has not changed in recent years and that ViaSat believes will increase once airlines adopt free-access-and-sponsorship policies, as JetBlue has done.

He said JetBlue has sold on-line retailer Amazon privileged access to the JetBlue WiFi to offset the cost of satellite transmissions from ViaSat.

“So what they pay us they get back from sponsored connectivity,” Dankberg said. The revenue opportunity appears enormous. Figure $1 or $2 per passenger, with 800 million annual airline passengers in the United States alone, plus the larger opportunity outside the United States, he said – a $3 billion annual addressable market in total.

ViaSat’s consumer broadband business is treading water until ViaSat-2 is operational. Its wholesale customer, Dish Network of Englewood, Colorado – a sister company of ViaSat competitor EchoStar Corp.’s Hughes Network Systems – continues to sell ViaSat service despite the competitive anomaly.

Dankberg said the ViaSat consumer broadband offer accounts for 25 percent to 30 percent of Dish Network’s half-million broadband subscribers in the United States.

“Dish would rather put customers on on the EchoStar satellite than on ours, but they’re still working with us,” Dankberg said. “We’re really happy with it considering the circumstances.”

Carlsbad, California-based ViaSat’s ViaSat-1 Ka-band broadband satellite entered commercial service in January 2012. Dankberg said that 5.5 years into its 15-year life, the satellite looks set to deliver the 30 percent return on invested capital that had been expected of it.

“We are at about $500 million in revenues for ViaSat-1, with an EBITDA approaching $200 million. If you can do that [with a satellite] for a few years, things are going to work out well.”

ViaSat’s business with the U.S. Defense Department has been increasing in the past couple of years as the company finds customers attracted by the same increasing demand for bandwidth as commercial customers.

Dankberg said ViaSat, after a long effort, been able to demonstrate ViaSat-1’s performance aboard U.S. military aircraft. The U.S. military’s long-expected shift to Ka-band has taken longer than expected, in part because of budget pressures that have limited the military services’ ability to outfit aircraft.

London-based Inmarsat too has suffered from the slow transition. Inmarsat Chief Executive Rupert Pearce told investors May 5 that the company’s Global Xpress Ka-band satellite system – three Global Xpress satellites now provide global coverage, with both civil and military Ka-band frequencies – has been slower than expected to find traction in the U.S. military.

“The strategic move of U.S. government and affiliated programs out of Ku-band and into Ka-band has not progressed at the pace we’d expected, simply because our end customers need to save money in the short term,” Pearce said.

Dankberg said U.S. defense officials had suspected that throughput was a function of the modem on the plane. “We outfit the planes with modems that can work with any satellite, incuding ours,” he said. “We have been trying to show them—here’s the same modem, now with a different satellite, and you see the enormous difference.”

ViaSat 2 is scheduled for launch in early 2017 and will provide more bandwidth and broader coverage, including the North Atlantic air routes.

PARIS — Eutelsat on May 12 delivered a multiple-warhead bomb to its investors — and by extension to the entire fixed satellite services industry — slashing revenue forecasts on weakness in its data transmissions, U.S. military, consumer broadband and Latin American operations and even in its gilded Hot Bird direct-to-home television business in Europe.

The results, announced after the markets closed in Europe, caused Eutelsat stock to drop 30 percent in trading on May 13. Shares of competitors SES of Luxembourg, Intelsat of Luxembourg and the United States, Inmarsat of London and AsiaSat of Hong Kong were also down sharply.

Eutelsat said its planned capital spending of 500 million euros ($566 million) per year for the coming years would be “substantially” reduced, with details to come in July during the company’s fourth-quarter earnings call. Eutelsat’s fiscal year ends June 30.

It was unclear what committed spending could be reversed on short notice. Eutelsat currently has five satellites on order. The first, Eutelsat 117 West B, is scheduled for launch in mid-June aboard a SpaceX Falcon 9 rocket. The second, the Eutelsat 172B, is scheduled for launch in early 2017 and has been partially booked by Panasonic Avionics for aeronautical broadband service in the Asia-Pacific.

In a brutal quarterly earnings-call baptism as Eutelsat’s new chief executive, Rodolphe Belmer said the company, which has made Latin America a focus of its recent investment, was surprised at the magnitude of the collapse in Latin American data business.

In particular, he said recent Eutelsat satellites launched over Latin America have had much slower take-up rates than predicted, in part because of the arrival of high-throughput satellites operated by competitors Intelsat and Telesat.

Belmer said Eutelsat’s high-throughput satellite investment would remain limited to consumer and small-business broadband services because the outlook for data delivery is bad.

Even operators of high-throughput satellites are likely to feel the pain, Belmer said, as the hoped-for new business generated by these satellites’ low per-megahertz prices has not yet materialized.

Paris-based Eutelsat is the world’s third-largest commercial satellite fleet operator when measured by revenue. Two-thirds of its business is in television delivery, a sector that continues to grow as broadcasters move from standard- to high-definition programming, and soon to ultra-high-definition television.

In Eutelsat’s case, this business has long counted on the highly profitable Hot Bird fleet over Europe. But even this business is showing signs of strain as Eutelsat’s Hot Bird distributors have trouble selling the capacity for which they had contracted.

Worried that these companies would cut prices to sell the bandwidth, Eutelsat is taking back capacity from under-performing distributors to maintain the premium that the Hot Bird fleet has always been able to charge by virtue of the television lineup already on board.

While Hot Bird remains “the jewel in the fleet,” Belmer said, Eutelsat has developed mini-Hot Bird-type orbital slots at 7 and 8 degrees west in Arabic nations; at 7 degrees East over Turkey; and among Russian broadcasters at 36 degrees East and 56 degrees East.

An African direct-to-home business is showing progress at 16 degrees East.

Belmer said pricing in these regions started low and are now beginning to rise with the virtuous-circle effect of more broadcasters with more programming attracting more viewers, which in turn attract more broadcasters on Eutelsat satellites.

Eutelsat’s business with government customers, mainly the U.S. Defense Department, has shown softness with the reduced U.S. troop presence in Iraq and Afghanistan. But the company had hoped that its increasingly global presence would help stabilize this business.

That has not happened yet. Eutelsat Deputy Chief Executive Michel Azibert said during the conference call that in the latest round of contract renewals, the U.S. Defense Department negotiated prices that were 65 percent of the levels of similar capacity contracted five years ago.

Azibert said the U.S. military’s “tougher procurement process and the competitive intensity” on evidence in the latest bidding round have lowered prices but not materially affected Eutelsat’s share of the total business. He said the company succeeded in winning 85 percent of its previous contracts.

Eutelsat’s results were the first concrete evidence of the early effects on the existing market of high-throughput satellites, whose multiple spot beams permit the reuse of radio frequency to offer much lower-cost bandwidth compared to conventional wide-beam satellites.

That allows fleet operators to sharply reduce the per-megahertz cost of bandwidth. The fear has been that this new technology will render obsolete much of the wide-beam capacity and cannibalize business in those companies operating high-throughput satellites alongside traditional spacecraft.

This thesis has been most publicly advanced by ViaSat Inc. of Carlsbad, California, which is fielding several high-throughput Ka-band satellites for global broadband connectivity and does not have a legacy business with conventional satellites.

ViaSat has said, in effect, that the traditional satellite industry cannot adopt the new technology because it would accelerate the collapse of much of this industry’s existing business.

Other satellite operators have countered that the lower per-megahertz prices would stimulate new users of satellite bandwidth – including the Internet of Things, aeronautical and maritime mobility and the connected car — that ultimately will outweigh the initial loss in revenue.

Intelsat and Telesat both launched high-throughput satellites serving Latin American in recent months.

Belmer agreed that the idea behind high-throughput satellites is to grow the satellite sector into areas that heretofore have not been customers.

“That is the theory,” Belmer said. “For the moment, that’s not what we see in the field. I cannot give you positive elements on that front.”

He said Eutelsat’s high-throughput investment would be limited to providing broadband access to consumers and small businesses, even though the company’s first endeavor in this sector, with the Ka-Sat satellite, has stopped growing because of a lack of capacity in high-demand regions of Britain and France.

Ka-Sat subscribers totaled 185,000 as of March 31, down from 190,000 on Dec. 31. Eutelsat still has not announced how it will add capacity to resume growth. No satellite has been ordered.

Belmer said Eutelsat would disclose to investors in July the measures it will take to better position itself in the market.

“We have taken the full measure of the factors leading to an industry-wide slowdown in momentum,” Belmer said. “We are adapting to this environment with a wide-ranging review of our organization and of our strategic priorities, which will notably include a downward review of our capital expenditures.”

PRAGUE – EchoStar Corp.’s Hughes division on May 10 said a recent consumer satellite broadband contract with the Turkish government and a combined Eutelsat/Facebook deal in Africa are just the start of the company’s ambition of replicating its U.S. success elsewhere.

EchoStar also lifted the veil, if only slightly, on its plans for a large S-band mobile communications satellite over Europe, whose launch has slipped to this summer following a rocket-related delay.

Despite the proximity of the launch and the size of the EchoStar investment in the EchoStar 21 satellite, Englewood, Colorado-based EchoStar has never spelled out exactly what business it expects to develop now that it has won European Union operating licenses.

There has never been any doubt about the consumer broadband plan: Develop North America, then head south to Central and South America before moving further afield.

Hughes expects to bring into service three new Ka-band satellites in the coming months, bringing the company’s total consumer broadband capacity in the Americas to 360 gigabits per second of throughput.

The most eagerly awaited is the EchoStar 19, also known as Jupiter 2, which will give Hughes badly needed new capacity to grow the North American consumer broadband service, which while more profitable than ever has been stuck in neutral in terms of subscriber additions.

EchoStar reported that Hughes’s North American subscribers totaled 1.038 million as of March 31, flat from Dec. 31 as most of the capacity of the two current satellites, Spaceway 3 and EchoStar 17/Jupiter 1, is booked.

Hughes reported revenue of $326 million for the here months ending March 31, flat from a year ago. But EBITDA, or earnings before interest, taxes, depreciation and amortization, was up 9 percent, to $99 million, as Hughes was able to squeeze additional earnings from its customer base by offering different subscriber plans and keeping a lid on user-terminal costs.

EchoStar 19/Jupiter 2 is scheduled for launch late this year aboard a European Ariane 5 rocket. The satellite’s entry into service will trigger the start of a recently signed contract with Global Eagle Entertainment (GEE) of Los Angeles, which provides satellite connectivity to business and commercial aircraft.

The GEE deal was Hughes’s first in the fast-growing aeronautical connectivity sector. Hughes President Pradman P. Kaul said Hughes’s aeronautical modem can deliver 200 megabits per second of throughput per aircraft.

Hughes has leased Ka-band capacity aboard satellites owned by Eutelsat of Paris and Telesat of Canada in an attempt to replicate its U.S. success in Central and South America, notably Brazil.

The Eutelsat 65 West A satellite, launched in March, should be in service this summer and provide 24 gigabits per second of throughput for Hughes’s Brazil consumer broadband service. The Telesat 19 Vantage satellite, scheduled for launch in mid-2018, will provide 31 gigabits per second of throughput from 63 degrees west.

In a May 10 conference call with investors, Kaul said the company has been focusing on satellite broadband in the Americas but has already won numerous contracts for Ka-band consumer broadband ground networks.

Two recent wins were in Turkey and Africa. The Turkish government has expanded an earlier contract with Hughes for a Jupiter ground network that will be double the territory covered by the previous contract. The network connects with Turkey’s Turksat 4B satellite’s Ka-band payload.

More recently, Eutelsat and social-media giant Facebook, which are cooperating in deploying an initial satellite broadband service in sub-Saharan Africa, selected Hughes for the ground infrastructure, including the ground terminals.

The decision was surprising insofar as Eutelsat is creating a consumer broadband joint venture in Europe with Hughes competitor ViaSat Inc. of Carlsbad, California, and uses ViaSat gear for Eutelsat’s existing European consumer broadband business.

Eutelsat and Facebook have leased the Ka-band payload on Israel-based Spacecom’s Amos-6 satellite, scheduled for launch in August aboard a SpaceX Falcon 9 rocket.

Kaul said the contract with Eutelsat and Facebook calls for three Hughes-built gateway Earth stations, two data centers, a network management system and an initial order for an unspecified number of user terminals.

EchoStar’s European mobile satellite communications business has never been clear beyond the fact that the company is launching a 7,000-kilogram satellite to perform the service. Anders N. Johnson, president of EchoStar Satellite Services, provided a few details during the conference call.

“We’ve developed, with our colleagues over at [Hughes], an adaptation of a portable data terminal, which acts as an S-band connected Wi-Fi hotspot capable of supporting telephony products,” Johnson said. “We’ve got an inventory of units that will be available for immediate deployment across Europe for testing and then available through the wholesale channel through a pre-existing relationship that we have in Europe with a distributor.

“We’re also in discussions with a number of other people about using the product as a feature for other services, where the S-band satellite capacity would act as a gap-filler [where] terrestrial networks are incapable of supporting service at the moment that it’s needed,” Johnson said.

PARIS—MDA Corp. of Canada on May 4 said bidding activity for commercial telecommunications satellites is at record levels and that the company had received seven requests for information (RFI) on terabit-per-second-throughput satellites from prospective customers.

An RFI is not an RFP and still less a contract, and 2016 so far has been a mediocre year for commercial telecommunications satellite contracts.

But in a conference call with investors, MDA Chief Executive Daniel E. Friedmann, who is stepping down from his position as of May 16, said he had never before seen this level of market effervescence, both for geostationary-orbit satellites and constellations of satellites in lower orbits.

He referred to at least one medium-Earth-orbit satellite constellation for which an RFP has been issued. MDA is a major supplier to Thales Alenia Space of France and Italy, which recently ordered 96 antenna subsystems for the next eight satellites in the O3b Networks medium-orbit constellation, which now counts 12 satellites in orbit.

Richmond, B.C.-based MDA purchased Palo Alto, California-based satellite manufacturer SSL in 2012. Since then, MDA has worked to broaden SSL’s appeal beyond its traditional commercial geostationary-satellite focus to include U.S. government business and smaller, non-geostationary satellites.

The strategy has borne fruit. SSL is under contract to build 13 optical Earth observation satellites for Google’s Terra Bella geospatial-imagery provider, and Friedmann said all indications are that Google is in the satellite business to stay – and to grow.

SSL recently won a contract to build a small Ka-band telecommunications satellite for satellite fleet operator Telesat of Ottawa, Canada – one of two that Telesat has ordered to register a proposed low-orbit constellation.

Friedmann said SSL’s recent win of another small prototype for a proposed low-orbit constellation is with a “well-funded customer” whose identity MDA has not disclosed.

Finally, MDA has invested about $25 million in OneWeb LLC, which is building 900-plus satellites for a low-orbiting Internet-delivery constellation. MDA is one of numerous prospective OneWeb suppliers to prime contractor OneWeb Satellites — a joint venture of OneWeb and Airbus — that have been investing on their own without a firm contract.

“We’ve continued to work very hard on many aspects of the OneWeb project as it proceeds to procurement,” Friedmann said.

Satellite broadband hardware and services provider ViaSat Inc. made a splash in the satellite market earlier this year by announcing that it would build, with Boeing Space and Intelligence Systems of El Segundo, California, two terabit-per-second ViaSat-3 Ka-band satellites, one over the Americas and the Atlantic air routes, and the second over Europe and Africa.

ViaSat competitor Inmarsat of London immediately labeled ViaSat-3 “a mythical beast.” To hear MDA tell it, many more such beasts are slouching their way to market.

SSL and fleet operator Eutelsat of Paris recently announced that the Eutelsat 65 West satellite, now in orbit, carries an Extremely High Frequency (Q/V-band) test payload. The two companies “are analyzing the potential of Q/V band as an enabler of future terabit satellite broadband programs,” MDA said.

Friedmann announced in April that he was leaving MDA after 20 years as chief executive to allow a U.S. citizen, based at SSL, to run the company as it seeks more U.S. government work. Howard L. Lance, former chief executive of Harris Corp., will succeed Friedmann as of May 16.

Several industry analysts assumed that Friedmann’s departure must have been due to poor financial results and could not have been simply a matter of needing a U.S. citizen, in the United States, to manage the business.

But MDA reported revenue of 562.4 million Canadian dollars ($432 million) for the three months ending March 31, up 5 percent year on year. Adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, was up 4 percent, to 97.2 million Canadian dollars.

The communications satellite business reported an EBITDA margin of 14.7 percent, compared to 13.9 percent for all of 2015.

In the conference call – which began with a tribute to Friedmann’s accomplishments at MDA by Chief Financial Officer Anil Wirasekawa – Friedmann sought to persuade investors of how important it was that MDA become more American.

MDA has estimated that $2 billion in space-hardware business would be contracted by the U.S. government in the near term, with many more billions on the way from various U.S. agencies.

SSL has submitted the required applications to U.S. government agencies to receive security clearance, a process Friedmann said would be completed by this summer.

“We have applied, and we have to produce a certain number of plans, which are familiar to us because we’ve operated special security arrangements and proxy arrangements in the past,” Friedmann said. “We are getting sponsorship from the agencies that want us to work for them. Our target is to have a facility clearance b the third quarter. That’s when we need it to hopefully execute on some of the new-build projects.”

Friedmann restated that the company’s satellite in-orbit servicing project, which has evolved into an all-American effort with an SSL satellite bus and U.S.-based operations, would not proceed before NASA and the U.S. Defense Advanced Projects Agency, DARPA, had clarified their own plans.

Friedmann said a NASA RFP is expected soon for a system that would refuel satellites in low Earth orbit – which is not what MDA had focused on in its earlier work, which targeted geostationary-orbit satellites. DARPA is investigating a geostationary-orbit robotic servicing mission that would inspect, repair and, if needed, relocate satellites, but not refuel them.

MDA is already under a contract valued at “several 10s of millions of dollars” to NASA and DARPA relating to the automatic in-orbit assembly of satellites.

Commercial demand for in-orbit servicing, he said, is difficult to predict.

“People are modifying satellites pretty fast,” Friedmann said. “Fueling old satellites may or many not be the best idea today.”

PARIS—Satellite fleet operator SES on April 29 said it had taken a controlling interest in medium-Earth-orbit broadband constellation O3b Networks, upping its stake to 50.5% from 49.1 percent, for $20 million.

The company said O3b shareholders had agreed to a scenario in which Luxembourg-based SES would purchase the remaining 49.5 percent of O3b for $710 million by October 2017 unless SES decides to do so beforehand or the shareholders agree to an O3b IPO.

SES Chief Executive Karim Michel Sabbagh said consolidating O3b into SES’s financial accounts, which had been expected, was “a game-changer” for SES’s positioning in growth markets including military, maritime, oil and gas, energy and cellular backhaul services. Sabbagh said an O3b role in aeronautical connectivity – recently demonstrated with a U.S. government aircraft using O3b and ViaSat Inc. gear – is likely to come.

Based in Britain’s Channel Islands, O3b operates a fleet of 12 satellites in an equatorial orbit 8,000 kilometers in altitude. The network’s core markets are between 45 degrees north and 45 degrees south of the equator, with limited applications feasible as far as 62 degrees from the equator.

Addressing a conference call with investors, Sabbagh said O3b, which has eight more satellites on order and scheduled to launch by late 2019, eventually would extend its reach to the polar regions by launching satellites in high-inclination orbits.

SES told investors that O3b is expected to report around $100 million in revenue in 2016, double that of 2015, and likely would surpass $500 million in annual revenue by 2021 with a 20-satellite fleet. O3b’s current backlog of firm orders is $350 million.

The $20 million investment taking SES over the 50 percent level in O3b brings SES’s total investment to $323 million. Both the transaction and the $710 million price agreed to by the shareholders for the remaining 49.5 percent gives O3b a valuation of $1.43 billion.

SES officials originally viewed O3b as a mixed blessing, fearing it could cannibalize some of SES’s heritage point-to-point and trunking business.

But that was then. Sabbagh said that after two years’ growth at O3b, SES has concluded that the feared cannibalization “hasn’t materialized. We’re in a much better place.”

The transaction, which SES Chief Financial Officer Padraig McCarthy should close by late this year, is also proof that a core O3b argument – that the low latency offered by low-orbiting satellites has a distinct advantage over geostationary-orbit satellites in certain markets – has been accepted by SES.

SES estimates that up to 20 percent of the global data market for the government, mobility and enterprise markets are latency-sensitive.

Other big fixed satellite service operators have come to the same conclusion. Fleet operators Intelsat and Telesat, in more modest ways so far, are investing in low-orbiting constellations, even if neither has made a commitment on SES’s scale.

McCarthy said O3b’s last 12 satellites in the current constellation configuration – four already in orbit plus the eight on order – would cost $80 million apiece, including construction by Thales Alenia Space of France and Italy, and launch by Europe’s Arianespace consortium aboard Europeanized Russian Soyuz rockets. The figure includes the cost of insurance.

The O3b announcement overshadowed SES’s overall financial results for the three months ending March 31. Here are highlights.

— Revenue from mobility applications, mainly aeronautical, rose 60.5 percent to 22.3 million euros for the three months ending March 31. Mobile now accounts for 5 percent of SES’s total revenue, up from 3 percent a year ago.

SES has signed major capacity contracts with aeronautical connectivity providers Gogo, Panasonic Avionics and GEE for the future SES-12, SES-14 and SES-15 high-throughput satellites, all scheduled for launch in 2017. SES in March launched a maritime service, using Ka-band capacity, initially for the European market.

— The SES-9 satellite launched March for aboard a SpaceX Falcon 9 Full Thrust rocket is expected to enter service by the middle of this year, bringing an additional 53 Ku-band transponders to SES’s capacitiy over the Asia-Pacific.

— High-definition broadcasting now accounts for 32.5 percent of SES’s total channel count, compared to 30 percent a year ago, reaching 2,375 channels worldwide. Broadcasters’ moving from standard-definition to high-definition takes more satellite bandwidth and is crucial for satellite fleet operators to counter the advances in signal compression.

SES also broadcasts 23 ultra-high-definition channels, up from 19 as of Dec. 31.

SES grew its total television channel count by 8.6 percent, to 7,309 channels. Video revenue grew 5 percent in the three months ending March 31, and 3.2 percent at constant euro-U.S. dollar exchange rates, and accounts for 71 percent of total SES revenue.

PARIS—Mobile satellite services provider Inmarsat has entered into a multi-year contract with Telenor Satellite of Norway to lease a large piece of the mobile Ka-band broadband capacity on Telenor’s Thor 7 satellite, industry officials said.

The agreement will allow London-based Inmarsat to bolster its growing aeronautical broadband portfolio over Europe and the North Atlantic air routes beyond Inmarsat’s own Global Xpress satellite, and without waiting for Inmarsat’s European air-to-ground network to deploy.

Inmarsat and Oslo-based Telenor officials declined to comment on the issue, but industry officials said the deal was concluded several months ago.

Telenor’s Thor 7, launched in June 2015, carries a conventional Ku-band payload for Telenor’s established television broadcast and maritime business, and a Ka-band spot-beam payload designed for the maritime broadband market.

Industry officials said that under the terms of their agreement, Inmarsat would not use Thor 7 capacity to compete directly with Telenor in the maritime market, which has historically been Inmarsat’s core business. Instead, Inmarsat will use Thor 7 for its fastest-growing business, which is aviation connectivity.

Inmarsat’s three Global Xpress Ka-band satellites, carrying both military and commercial Ka-band payloads for mobile customers, are in orbit.

The company is also building its European Aviation Network, to feature a network of ground-based terminals to provide high-speed connectivity in European aeronautical markets too concentrated for a satellite alone. The company has an S-band satellite payload under construction to serve the same market alongside the air-to-ground technology.

Inmarsat is also building two Inmarsat-6 L- and Ka-band satellites to continue its heritage L-band mobile connectivity business and expand its Ka-band broadband portfolio. Finally, a fourth Inmarsat Global Xpress satellite is nearing completion. Inmarsat is mulling where to place it.

For a time, it looked like Inmarsat would position the fourth Global Xpress satellite over Asia to appeal to the Chinese market. Inmarsat has yet to disclose its final decision.

That means three satellites with Ka-band mobility payloads under construction for Inmarsat. But Leo Mondale, head of the company’s aviation division, let slip that a fourth payload was also on the way.

“In addition to the three Ka-band payloads we have in orbit today, we ‘ve committed to four additional ones that are being built. They are under contract, and will be launched an operated, and there could be more by 2020,” Mondale said March 8 at the Satellite 2016 conference in National Harbor, Maryland.

Mondale made his comments during a debate with competing Ku- and Ka-band mobile satellite providers, especially Carlsbad, California-based ViaSat Inc. ViaSat is designing a terabit-per-second-throughput ViaSat 3 satellite, with one each to be placed over the Americas and Europe around 2020.

Mondale’s point was that 2020 is a long way off and the market landscape could change substantially by then. He declined to identify the additional Ka-band capacity, saying only: “There is a payload that we are not disclosing the details of, that we have secured in addition” to the fourth Global Xpress and the two Inmarsat-6 spacecraft, he said.

Telenor has scheduled an event in London on May 11 to unveil its Thor 7 Ka-band maritime business, which has been in beta testing in the months since its mid-2015 launch.

Inmarsat has gone so far as to acquire an existing maritime satellite service provider and to transition what is now an installed base of Ku-band VSAT-equipped ships to Global Xpress’s Ka-band, at substantial cost to Inmarsat.

It is unclear what strategy Telenor will use to wean its Ku-band maritime customers to Ka-band, or whether the company feels the need to do so. It could let existing customers migrate from Telenor Satellite-provided Ku-band to Ka-band at their own pace, without forcing the switch to Ka-band.

In a series of presentations in February, Telenor said less than 5 percent of current maritime commercial vessels are equipped with VSAT terminals, leaving a large greenfield market available for Ka-band.

The company said it moved to Ka-band because Ku-band orbital slots over Europe are difficult to acquire, with most of them occupied with serving the highly profitable broadcast market.

“We can offer higher bandwidth through smaller antennas,” Telenor’s Julian Crudge said during the presentation.

Tore Morten Olsen, head of Marlink, a maritime satellite services provider that is the former Telenor Satellite Services, said tests of Thor 7 in the North Sea and other rough-weather maritime areas where Telenor operates have shown that rain-fade from Ka-band is manageable.

“During rain, the receive signal dropped compared to cloudy conditions, but the system still kept high performance,” Olsen said. “Heavy rain at [Telenor’s] Nittedal hub [in southern Norway] did not degrade the signal. Seamless beam switching between the Nittedal teleport and the diversity teleport seemed to work well.”